RESTRICTED Roport No. SA-28a This report Public Disclosure Authorized is for official use only by the Bank Group and specffically authorized organizations or persons. It may not be published, quoted or cited without Bank Group authorization. The Bank Group does not accept responsibility for the accuracy or completeness of the report. INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT INTERNATIONAL DEVELOPMENT ASSOCIATION Public Disclosure Authorized A PROGRAM OF PREINVESTMENT STUDIES IRAN Public Disclosure Authorized April 27, 1972 Public Disclosure Authorized South Asia Department CURRENCY EQUIVAIET RJs. 75075 US$ 1000 Rls0 100 US$ 1.32 THE MISSION This report is based on the findings of a mission which visited Iran during April-May, 1971. The mission consisted of the following: H. Eschenberg (IBRD) Chief of Mission P. Engeliann (IBRD) Preinvestment Adviser J.C. Gerring (IBRD) Livestock Specialist M. Fireman (IBRD) Irrigation Engineer F. Dunnill (IBRD) Education Specialist D. Bhatia (WHO) Public Health Specialist H. Siddiqui (IBRD) Population Specialist E. Moore (IBRD) Power Engineer H. Schlechtriem (IBRD) Transport Economist R. Mulligan (IBRD) Highway Engineer S. Hayden (Cons.) Aviation Specialist J. Boyd (IBRD) Tourism Specialist H. Hossa (obns.) Urban and Housing Specialist J.S. Hale (Cons.) Water Supply and Sewerage Specialist P. Whitford (IBRD) Water Supply and Sewerage Specialist The following participated in the preparation of the report at Headquarters: Mrs. C.S. Hardy (IBRD) General Economist J. Dumoulin (IBRD) Agricultural Engineer I.A. Nbwatead (IBRD) Telecommunications Engineer IRAN A PROGRAM OF PREINVESTMENT STUDIES Page No. INTRODUCTION AND SUMMARY i -v 1. Agriculture . *......**.***...**............ ... **. 1 - 15 2, Education . 16 - 20 3. Health and Population ..... ........... ..............-.... 21 - 38 4. Industry and Mining .............................. o. 39 - 44 5.- Power .. .... .. .. a......... .... .............. 0 0..........0 45 - 49 6. WIater Supply and Sanitation ........................ 50 - 60 7. Telecommunications . .o .. o.o.0........................ 61 - 64 8. Transportation ............................. 0...... 65 - 86 9. TotLrlsm ............................ 87 - 92 10. Urban Development and Housing ...................... 93 -113 ANNEX A - Health Main Features ........ ... a...................... 1 - 14 Key Problems for Future Development . ....... 15 - 17 B - Population and. Family Planning Population ........................... ........ 1 - 3 Family Planning Program .... 6................3 - 9 Key Problems for Future Development ........ 9 - 12 C - Water Supply and Sanitation Sector Background and Present Situation .... 1 - 4 Organization of the Sector ................. 4 - 7 Financial and Administrative Policies ...... 7 - 8 Principal Problems .................. *0..... 8 - 11 Role of International Agencies ............. 11 Page No. ANTEX D - Urban Development and Housing Introduction ...... ......* 1 - 2 Urban Population & Urban Centers ..... 2 - 6 Urban Development and Housing in the the Fourth Plan ..................... 7 - 8 Policy and Legislation .............. e 8 - 10 Organizational Structure and Current Activities .......... o....e....eee 11 - 23 Housing Construction and Building Materials Industry ................. 24 - 25 Proposed Regional Development Planning 25 - 26 Conclusion:, Key Issues and the Proposed. Program of Preinvestment Studies ...e .o e 27 - 29 MAPS - Iran General- Map Iran Population Density Iran Land Utilization Iran Agricultural Products Iran Rainfall. Iran Location-of Dam Sites Iran Geog;raphic Units for Regional Development Planning INTRODUCTION AND SUMMARY 1. The program of preinvestment studies-/ presented in this report is based on several Bank missions which were in Iran between November 1970 and May 1971. The program was compiled and finalized by a mission specifically mounted for this purpose in April-May 1971; this mission worked in close cooperation with the Plan Organization of Iran, the planning units of various ministries, and the Resident Office of the United Nations Development Programme (UNDP). In addition, the mission was assisted by private and autonomous organiza- tions in Iran, specialized agencies of the United Nations and bilateral aid agencies. 2. The following paragraphs outline the objectives and scope of a program of preinvestment studies, describe the approach and methods used in program preparation, and summarize the program. The details of the program arecontained in the ten sectoral chapters of this report. Each chapter contains (a) a brief discussion on the background and key issues of the sectors, (b) the rationale for the mission's study recom- mendations and (c) information on the scope, timing and cost of proposed studies. Most chapters refer to previous Bank reports in which a more detailed discussion of sectors can be found, but for four sectors (health and population, water supply and sanitation, urban development and hous- ing, and tourism) detailed discussions are included in the Annexes to this report. 2/ Objectives and Scope 3. The program of preinvestment studies presented in this report is intended to: (1) assist the Government of Iran in defining and scheduling studies which accord with its development objectives; (2) provide the UNDP and other agencies with a sound basis for allocating funds for preinvestment assistance to Iran; and (3) accelerate and improve the preparation of development projects for possible financing by international or bilateral lending agencies. 1/ The term "preinvestment study" as used in this report means units of work which (a) must be completed prior to investment decisions relat- ing to projects or sectors significant for national or regional dev- elopment and (b) will require the assignment of a team of experts or consulting firm(s). The purpose of these studies may be to (1) establish investment priorities, (2) determine the feasibility of individual projects, or (3) define changes in governmental policies, operations and institutions necessary for the successful implementa- tion or functioning of investment projects. 2/ In the draft version of this report the annex on tourism will be printed later than the other annexes; it will therefore be in a separate volume. 4. The program consists of recommendations on the priority and scope of proposed studies and, in most cases, estimates of the time and resources required for study execution. These estimates are gen- erally to an accuracy of plus or minus thirty percent. 5. An attempt was made to identify and include in the program all important studies required for investment decisions in the next five years. As a minimum goal, however, the recommended programs are inten- ded to cover all studies that should be started within the next two years. 6. No attempt was made to define all details of the studies pro- posed in the program. Further elaboration of study scope and refinements of the cost estimate will be needed before the government can contract for or seek financing of a specific study. This additional work is ex- pected to be done by the government or by agencies interested in sponsor- ing or assisting the studies, as part of the steps following adoption of the program.l/ 7. The program does not include work related to final engineering of projects, preparation of contract documents for construction or pro- curement, and more specialized types of studies, such as those required to draft legislation that would implement recommended policy and admini- strative changes. These activities are considered to be in the "investment" rather than the "preinvestment" stage. Approach and Methods Used 8. In March 1971, preliminary discussions were held in Tehran. with the Plan Organization and the Resident Representative of the UNDP, to be in general agreement on the proposed approach for preparing a pre- investment study program. A consensus was reached that the main focus of this effort should be on the identification of studies required for preparation of the Fifth Plan, but that the program should not be limi- ted to this time frame. The Plan Organization compiled inventories of completed, current and proposed preinvestment studies and the Resident Office of the UNDP provided data on all studies and technical assistance which were in progress with foreign assistance. These inventories and supplementary information provided by various sectoral ministries and bilateral agencies were reviewed and evaluated. 9. Based on available information on existing studies and a general review of development prospects in the major sectors, additional needs for future studies were identified. Except in the education sector,2/ the approach to this work was as follows: 1/ The World Bank Group will not necessarily be associated with the fin- ancing or execution of studies recommended in this report or with the financing of the investment projects resulting from the studies. 2/ Due to staff limitations, the same procedure could not be followed in this sector; for discussion see Chapter 2. - iii - (1) starting with a development strategy for the sector as a whole, both the principal investment needs and the policies and institutional changes necessary for the development of the sector were identified; (2) where deficiencies in the knowledge of sector problems and resources could be observed, an attempt was made to define the areas where further study is needed to provide a proper basis for investment planning; (3) working back from prospective investments,